October 15, 2017

Are you overwhelmed by all the charitable requests you get at every store you shop at? I am. And all the email requests for contributions to good causes. And all the TV requests, the Go Fund Me, crowdfunding and fundraising websites. I'm sure these are all good causes, and if they are, why isn't the government contributing to them? I'm not even sure that, when they ask you for a contribution at Petco, the Petco corporate headquarters are contributing.

President Donald Trump said to Puerto Ricans that the Federal government was not going to help them that much. He as much as said, "Get off your lazy asses and help yourselves." And this after Puerto Rico has been devastated beyond belief. “Puerto Rico survived the Hurricanes, now a financial crisis looms largely of their own making. A total lack of accountability say the Governor. Electric and all infrastructure was disaster before hurricanes. Congress to decide how much to spend. We cannot keep FEMA, the Military & the First Responders, who have been amazing (under the most difficult circumstances) in P.R. forever!," he tweeted.

For right wingers, including Trump, they don't see charity as a government function. They think charity should be undertaken privately. The only government function they consider legitimate is fighting wars. If they had their way there would be no FEMA, no disaster relief. They have expressed this in an action-speaks-louder-than-words statement by underfunding FEMA and any other government operation that actually helps people like, for instance, the Peace Corps and AmeriCorps.

So all the requests to average citizens to contribute to this or that cause play right into the Republican right wing philosophy that charity is not a government or public function. It should be undertaken privately on a voluntary basis. Don't ask your grocery or drug store if their CEO is matching your contribution when they ask you for a donation on that little machine you stick your credit card in.

Perhaps we should rethink whether or not the billions of dollars needed for emergency assistance from natural disasters like hurricanes, fires and earthquakes should be provided by the government or on a voluntary basis by we citizens. Trump has fired a shot over the bow of Puerto Rico. My advice to Puerto Ricans is to get out while the getting's good.Otherwise, the hedge fund vultures will be coming for what little money you have left. They've made the bet that they will get a good return on your $80 billion government debt. They don't care that you have been devastated by a hurricane. They want their money. Austerity looms both from the hurricane's devastation and from the vulture hedge funds as well.

September 30, 2017

There's one loophole in your situation: you're American citizens and can leave Puerto Rico and come to one of the 50 states. In my opinion none of the Caribbean islands have any future due to global warming. They're going to get shellacked again and again. But not all of them have the advantage of being American citizens and can move to the mainland any time they want. The Mayor of San Juan is upset by the Trump administration's lack of concern.

San Juan Mayor Carmen Yulín Cruz reacted with shock and anger to acting Homeland Security Secretary Elaine Duke on Friday, saying Puerto Rico's recovery is "not a good news story." "This is a 'people are dying' story," she said in disbelief. Then, of course, Trump fought back. President Donald Trump launched a Twitter attack on her for "poor leadership ability," saying she and others in Puerto Rico "want everything to be done for them when it should be a community effort."

The people of Puerto Rico are conceived of as poor by the Trump administration. The Puerto Rican government even before Maria was in a debt crisis. The government's outstanding debt exceeds $70 billion with an additional $50 billion in pension obligations. Even before the hurricane doctors were leaving at the rate of one per day. Due to a decade-long recession, more than 50,000 residents leave each year - most for jobs and new lives on the mainland.

So who's left? Mainly poor people. Professionals, especially health care professionals, have left just when they are needed most. You're in a ton of debt. Get out while the getting's still not totally bad. The Trump administration and Republican philosophy in general is not in the business of charity. They believe charity should be privatized. It's not a government function. The only legitimate government function, they believe, is war. Everything else should be privatized. That's why every time Americans buy food for themselves or their pets they are asked by some corporation to donate to charity.

He tells about one of his students who, though caring to extreme about the plight of poor people in the world, nevertheless, chose to go to work on Wall Street when he graduated. His reasoning was that he could help the most poverty stricken by dedicating a large amount of his considerable salary to helping them rather than going to work as a volunteer working directly with them in Africa, for instance. A huge amount of money contributed to the right charities would alleviate the conditions of more people than would be helped by a person of meager resources who devoted his working efforts to their cause.

The utilitarian part of me can't argue with this approach to helping the poor. However, I'm bothered by the fact that this guy went to work for the Evil Empire (pardon my hyperbole) in order to do good for others. This isn't exactly the Robin Hood approach. Robin Hood didn't go to work for the devil; he stole from him. To my way of thinking this is an ethically better approach.

I consider many occupations to be unethical including working on Wall Street. To say that a greater good can be accomplished by taking ill gotten gains after contributing to an enterprise's evil activities can't be justified by saying that, on a utilitarian basis, more good can be accomplished than bad created. Singer is saying that those who go into teaching because their passion is helping children would do better by going into a profession in which they could earn far more money and then using a portion of that money to help the uneducated. This is pure nonsense. When taken to extremes he justifies the sacrifice of some people for the greater good of saving a larger number.

For example, suppose you were faced with the proposition that you could earn a million dollars by killing someone. With that million dollars you could help 100 poor children escape poverty. Does that justify killing one person? I don't think so.

Should One's Life Work Be Ethical?

I consider one's life work to be something that should be considered from an ethical viewpoint. There are jobs and occupations which, although legal, are from my viewpoint unethical. Take for example petroleum engineering. There are very high salaries for college graduates in this field and jobs are readily available. But in an age where climate change is being exacerbated by the burning of fossil fuels, I consider it unethical to go to work for the fossil fuel industry.

There are other jobs and professions I consider to be unethical and others that I consider ethical. This is just my own personal assessment. Others would disagree, but I consider working for the military-industrial complex unethical because it supports the war industry instead of putting time and energy and money into the Peace Corps and AmeriCorps. I consider working in the advertising industry unethical because it exists to convince people to part with their money for the enrichment of corporations while pretending to be concerned about the welfare of the individuals they seek to influence. It promotes "unbridled consumerism" as Pope Francis has said.

The pharmaceutical industry which charges what the market will bear for life saving drugs is clearly unethical. The drug, called Daraprim, was acquired by a former hedge fund manager. The price was immediately raised to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.

I consider teaching, care giving, nursing, providing services to the local economy such as those provided by tradesmen or craftsmen to be ethical. Factory farms I consider to be unethical; organic farms I consider to be ethical. I could go on creating two lists: ethical and unethical jobs and occupations but I won't.

Other people can make up their own lists. Most Americans would probably consider any legal job or occupation to be ethical. I disagree obviously.

Here is Singer's very persuasive argument:

I met Matt Wage in 2009 when he took my Practical Ethics class at Princeton University. In the readings relating to global poverty and what we ought to be doing about it, he found an estimate of how much it costs to save the life of one of the millions of children who die each year from diseases that we can prevent or cure. This led him to calculate how many lives he could save, over his lifetime, assuming he earned an average income and donated 10 percent of it to a highly effective organization, such as one providing families with bed nets to prevent malaria, a major killer of children. He discovered that he could, with that level of donation, save about one hundred lives. He thought to himself, “Suppose you see a burning building, and you run through the flames and kick a door open, and let one hundred people out. That would be the greatest moment in your life. And I could do as much good as that!”

Two years later Wage graduated, receiving the Philosophy Department’s prize for the best senior thesis of the year. He was accepted by the University of Oxford for postgraduate study. Many students who major in philosophy dream of an opportunity like that—I know I did—but by then Wage had done a lot of thinking about what career would do the most good. Over many discussions with others, he came to a very different choice: he took a job on Wall Street, working for an arbitrage trading firm. On a higher income, he would be able to give much more, both as a percentage and in dollars, than 10 percent of a professor’s income. One year after graduating, Wage was donating a six-figure sum—roughly half his annual earnings—to highly effective charities. He was on the way to saving a hundred lives, not over his entire career but within the first year or two of his working life and every year thereafter.

Should One Sell His Soul to Wall Street in Order to Do Good?

So Singer apparently considers working for Wall Street a more ethical job than being a professor. I don't think so. He doesn't stop to consider the ethically corrupting influence that Wall Street will have on Wage himself who may at any time decide his money will be better spent on his own noncharitable predilections or may decide that selling his soul to Wall Street, even for a good cause, is something he can no longer do.

He doesn't stop to consider how much evil Wage will be participating in simply by doing his job. He doesn't consider the corrosive influence that working in a toxic environment will have on Wage's soul. He doesn't consider that Wage might not be able to tolerate working in that environment for more than a short time like many young people who went to work on Wall Street right after college. In short Wage is selling his soul for a mess of pottage, pottage to be sure that he intends to give away to help others, but pottage gained by losing his soul, his humanity and his integrity nevertheless.

Singer's argument suggests that it's up to rich people to save the world. In fairness rich people do a lot of good through their charities. But it's not an unmitigated good. The Bill and Melinda Gates Foundation has done much good in the world which wouldn't have been possible without the success of Microsoft Corporation. The Gates Foundation is not without controversy, however, including their support for GMOs and charter (privatized) schools. Gates and other rich people who have gotten rich off of technology naturally feel that there's a technological solution for every problem.

So is it up to billionaires to do the most good in the world because they possess the most resources? We also must consider that not all billionaires are up to doing good with their money. Many of them use their considerable resources, instead of helping people, to maintain a system of oppression over people lest those people take their resources away from them. That's why we can't trust that billionaires are going to save the world. Many of them are up to making it worse, particularly the plight of the least well off.

As H.L. Mencken writes, "The urge to save humanity is almost always a false front for the urge to rule. Power is what all messiahs really seek: not the chance to serve." While some philanthropists support good causes (like Bloomberg’s fight against Big Tobacco), other pet causes are not so humanitarian. While we may applaud the work of Bill Gates, many philanthrocapitalists, like the Adelsons and the Kochs, have decided that their philanthropic venture will be empowering the Ted Cruzes of the world to wreak havoc. Wealth is power, and concentrated wealth is concentrated power. The most benevolent inventions are also the cruelest.

A better approach might be to limit the economic power that can be accumulated by corporations which then ends up in individual hands. Some billionaires do a lot of good in the world; some do bad, but not everyone can be a billionaire. Everyone can aspire to working in an ethical job or occupation. A system that results in the accumulation of economic power by the 1%, no matter how much resultant good comes with it, is not ethical especially when that means that the plight of the lower classes worsens from year to year. A good society would distribute economic well being more equitably and democratically. Then we all wouldn't be so dependent on the noblesse oblige of the rich.

Charity is Good But What About Justice?

Some make a distinction between charity and justice. Charity deals with the immediate needs of desperate people. Justice deals with setting things up so that they don't become desperate in the first place:

Justice directly confronts the challenge of preventing people from ending up in vulnerable situations. What causes over 15 million children in the U.S. to go to bed hungry each night? Why don’t we have universal public health care? Why aren’t public colleges and universities tuition-free like high schools in the U.S. and [colleges in] most western European countries? Why are our public works crumbling and creating unnecessary obstructions for disaster relief (reaching people stranded after hurricanes)?

It is advocacy promoting justice that seeks the prevention of the causes that lead to so much misery, institutional harm, poverty, and the loss of human life and potential. Repairing the wreckage of wars places huge demands on charity. Waging peace and negotiating arms control agreements places huge demands on justice.

Singer says, "Living a minimally acceptable ethical life involves using a substantial part of our spare resources to make the world a better place." You can't argue with that, but that applies to everyone in the economic spectrum not just to rich people. And many are so hobbled economically that they don't have any spare resources. They need an inflow of charitable or societal resources just to make ends meet. They should not be contributing to charity at all.

If society provided more opportunities for people to do good i.e. by transferring resources from the war machine to the Peace Corps for instance, more people could work in ethical occupations and pull themselves and others out of poverty at the same time. Too often, however, what the American society provides is opportunities to work in unethical occupations which are rewarded handsomely while working in ethical occupations is rewarded minimally or not at all. If the budgets of the military-industrial complex and those of the Peace Corps were transposed, a massive movement of those working in ethical occupations would provide a greater force for good than the combined forces of ethical billionaires.

Reliance on billionaires to do good in the world is a return to feudalism where kings were the only forces for good or bad in the world depending on whether they were enlightened despots like Catherine the Great and Frederick the Great or just plain despots like Ivan the Terrible or Caligula.

We must consider whether a society which creates "opportunities" for some people to become obscenely wealthy, even though they can then supposedly turn around and use their money to do good, is as good a society as one which creates opportunities for most people to work in ethical occupations and do good at the same time.

Singer's world view is one where everyone is well off and gives to charity without sacrificing any of their own self-interest at all. They needn't do that because after all they are billionaires and have much more money than they ever could spend on themselves. It's not the real world. It applies to a small fraction of rich people - those who want to use their money for good purposes. They barely, if at all, offset the rich who use their money to perpetuate bad purposes.

Perhaps Wage will find out that he cannot sacrifice his own soul to gain the world even if he gives half of it away.

In an article in Salon Sean McElwee says : Charity is great, but it won't bring real change — and worse, it perpetuates the myth that we need the ultra-rich:

Think of the planet’s best human being. Who are you thinking of? Pope Francis? Your parents? Justin Bieber? According to Business Insider, it’s Mark Zuckerberg. Why? Because he’s planning to donate $1 billion (less than 5 percent of his massive fortune) to charity. While it’s certainly welcome, philanthropy is far more insidious than it appears at first sight. It tends to lead to fawning press coverage, but little in the way of good reform. Worse, it perpetuates the myth that society’s problems can be solved by the rich and powerful. ...

There’s a very real sense in which it would be hard for Zuckerberg to have done less for the poor. After all, he and his rich Silicon Valley friends regularly use their wealth to lobby for policies that would make them even richer — even if in the guise of social responsibility.

Billionaires Do Not Always Use Their Money for Good Purposes

And that's the rub. The rich in addition to their charitable endeavors also use their money to perpetuate the system that made them wealthy in the first place even if that system fosters subjugation and oppression for the vast majority. McElwee writes: "In charity, the rich approach the poor not as equal citizens but rather [as] benefactor and serf. It perpetuates a class society, where the poor and middle class are dependent on the wealthy."

We must also consider the rationale and ethics of a society that makes some people insanely wealthy for inventing things of questionable and even trivial value. For instance, take Snapchat. Snapchat has made its corporate owners, Evan Spiegel and Bobby Murphy fabulously wealthy. Using the application, users can take photos, record videos, add text and drawings, and send them to a controlled list of recipients. These sent photographs and videos are known as "Snaps". Users set a time limit for how long recipients can view their Snaps after which Snapchat claims they will be deleted from the company's servers.

The main purpose of SnapChat is so users of the application can take pictures of their "junk", send them out and then not have to worry that a prospective employer might view them. In June 2013, Snapchat raised $60 million in a funding round led by venture-capital firm Institutional Venture Partners. According to Forbes, Snapchat’s chief executive Evan Spiegel and co-founder Bobby Murphy, have made it to the 2015 Forbes 400 list. Mr. Spiegel, who is 25, is now the youngest billionaire in the world and currently his net worth sums up to $2.1 billion. Don't tell me that we live in an ethical society when a piece of crap like SnapChat can raise $60 million, make Spiegel a billionaire and poor kids go hungry.

In addition it turns out that Spiegle didn't even invent SnapChat. It was invented by former "friend", Reggie Brown, who was subsequently shut out of the company. This is reminiscent of Facebook's Mark Zuckerberg who shut out the Winkelvoss twins, who actually invented Facebook, and later settled with them for $65 million, a large amount to be sure, but not the $35.7 billion Zuckerberg is worth. Long story short, people screw their friends over huge amounts of money. This is an ethical society when things like this can happen and people can make huge amounts of money for crapola?

On May 9, 2013, Forbes reported that Snapchat photos do not actually disappear, and that the images can still be retrieved with minimal technical knowledge after the time limit expires. The Electronic Privacy Information Center consequently filed a complaint against Snapchat with the Federal Trade Commission, stating that Snapchat deceived its customers by leading them to believe that pictures are destroyed within seconds of viewing.

Snapchat eventually settled with the Federal Trade Commission over allegations it deceived users over the amount of personal data it collected and was responsible for a security breach that impacted 4.6 million customers. It will face privacy monitoring for 20 years.

That's the story in a nutshell. Unethical people making huge sums of money in unethical enterprises while the poor and people striving in ethical professions such as teaching and caregiving starve to death. Capitalism, especially as it is currently conceived, manifested and practiced, is unethical. Make no mistake about it: capitalism is not some absolute thing-in-itself that has always existed from time immemorial. It is a moving target, continuously being reinvented and updated to advantage the already rich with every new wrinkle that some financial expert can come up with.

In other words, it evolves and not necessarily in benign ways. Its original purpose, to develop pools of money that could be used in enterprises which would benefit society, has long been forgotten. It allows for despoiliation of the environment, the granting of huge rewards to insiders who come up with stuff that only degrades the culture and the complete neglect of the kinds of enterprises that are necessary to make peace in the world and build a better and stronger society.

June 24, 2015

Why Don't Corporations Contribute to Charity Instead of Hitting Up Their Customers?

Do you find it annoying to be hit up for a donation every time you make a purchase? You're out buying groceries or cat food or mouthwash and you get asked to make a donation to some charity. "Would you like to contribute a dollar to help homeless dogs?", the check out person asks. I'll tell you what. Why don't you reduce my total by $1.00 and contribute that to charity? Do you think Walgreen's or Petco could afford that? Give me a dollar off my freakin' bill. I just scraped enough money together to make sure our cat is adequately fed and doesn't go homeless.

I really think I am capable of making my own decisions about what charities I want to donate to. I don't want to be prompted every time I buy something. And is Walgreen's CEO who made over $13 million in 2013 contributing anything in this campaign? Heck no, and neither are the Board of Directors who make tons of money in stock grants for attending a few meetings per year.

"If there's a bunch of people in line behind me and the cashier asks me to make a donation, it makes me feel so trapped and judged, especially if it's for the troops," said Jennie Blackburn, who frequently gets solicited at Walgreens and Publix. "It's a lot of pressure."

Joe Loveland says "It feels like the glaring checkout person is judging while customers are craning their necks to see what kind of sociopath would deny hope to the homeless puppies, cancer battlers or wounded warriors." What the other customers don't know is that the person not contributing at the check out line might prefer to contribute to another charity and would prefer his or her dollars to go there.

Let's have matching contributions from the CEO and Board of Directors and then I might feel better about contributing something. But they take nothing out of corporate profits to contribute to charity. "CVS and Walgreens, which owns the Duane Reade drug stores in metropolitan New York, said that they pick up the administrative costs of the campaign and send every dollar donated to the charity. The companies said they don’t typically match consumers’ contributions ..."

Are they just dunning their customers while they use their customers' charitable contributions as a tax write off? Do I really have to get badgered every time I go to Walgreen's? Where's the "no hassle" check out line? Target has a sign outside that says "No Soliciting." It's supposed to guarantee a "hassle free shopping experience". Well then, why do they hassle you inside the store?

Whole Foods Market and Petco are among the many companies that collect donations at the checkout counter. At Petco, donations all go through the Petco Foundation, which keeps less than 10 percent for administrative overhead. The rest helps thousands of local animal groups like Gimme Shelter, which rescues abandoned cats.

“We have great success with our customers. They are open hearted, they want to give, they want to help animals in the community,” said Lori Morton Feazell, Petco’s Director of Animal Care and Education.

Is Petco or Walgreen's Matching Their Customers' Contributions?

So Petco is taking 10% of customers' charitable donations to pay some administrator? They can't even contribute that? Are they giving anything out of their considerable profits or is it just their customers they're trying to shame into giving?

And whether the customer is rich or poor, they all get hit up the same. I'm for charitable giving for those well enough off to do it, but I don't think poor people who need the money for their basic expenses should be donating to charity. Petco doesn't care. They're equal opportunity dunners.

I'll state it emphatically. Poor people and those with less than six months expenses in savings should not contribute to charity. Charity begins at home. Do you have enough in savings to support yourself in retirement? Then you have no business contributing to charity. Contribute to your own retirement account or savings account instead or you may end up being a charity case yourself.

Are your kids' financial futures secure? If not, you might end up being their charitable contributor of last resort. Philanthropy i.e. charitable contributing is something that the rich should feel obligated to participate in, but dunning the poor and lower middle class at Petco and Walgreen's is a cynical exercise to make the corporations look good at the expense of people who should not for the most part be contributing to charity.

Rich people should be doing their own research to see what charities are worthy of contributions, but often they are only interested in legacy contributions i.e. something that they can get their name on for posterity. If the charity is keeping more than 20% of contributions for administration, advertising or fundraising, you are participating in a scam by contributing to them .

For instance, Paralyzed Veterans of America spends almost 70% of contributions on administrative and fundraising expenses. They spend only 32.5% of donations to actually help paralyzed veterans. You be the judge.

The comedian, Lenny Bruce, went door to door wearing a cleric's collar asking for donations to some charity that he made up. Most of the money went right in Lenny's pocket, but he did keep his nose clean with the IRS by writing a small check to the purported victims he was supposedly trying to help. Check out a charity with a website such as Charity Watch which rates charities A to F before donating.

What About CEOs Who Make Millions Without Matching Customer Contributions?

San Diego based Petco's CEO is James M. Myers. He's donated money to his alma mater, John Carroll University, but to homeless pets? I don't think so. The website ceopaycut.org contacted CEOs including Mr. Myers asking them to pledge to take a pay cut in order to spread the wealth. "Jim" Myers was one of the CEOs contacted. His email is jim.myers@petco.com. So far it's been 3 years and there has been no response from Mr. Jim Myers.

But he's just typical of most. None of the others contacted has responded either. Mr. Myers is also on the Board of Directors of Jack in the Box Corporation from which he has received a bunch of generous stock grants. But youth wants to know: has "Jim" matched his customers' contributions to help homeless pets? I doubt it. If he had, we'd hear about it.

Petco's Jim Myers, while manipulating customers into donating for homeless pets, has also been responsible for sickening pets that do have a home. In January 2015 Petco pulled Chinese made cat and dog treats off their shelves after reports that they had sickened their customers' pets. They also have stopped selling a boozy treat meant to calm dogs as of January. They have taken the Good Dog Pet Calming Supplement off their shelves after some protested over the alcohol content of the product. The product contains an astonishing 13 percent alcohol.

The ASPCA has previously warned against the ingestion of alcohol by animals, saying even the smallest amount can be fatal.

This comes just two weeks after the San Diego-based company removed all Chinese-made dog and cat treats from its website and stores over fears they were linked to 1,000 dog deaths since 2007 - and an unknown number of animal illnesses.

The illnesses and deaths were linked to a number of treats, including chicken, duck or sweet potato jerky.

'We know some pet parents are wary of dog and cat treats made in China, especially Chicken Jerky products, and we’ve heard their concern,' said Petco CEO Jim Myers in a statement last May.

As of 2009, Jim was making over $800,000 in salary and bonus not including stock options. His nonvested stock options were valued at $734,550. This doesn't count all the stock granted due to his position on the Board of Jack in the Box.

But how much has Jim given for the sake of homeless pets? For all I know he may be using his customers' charitable contributions as a tax write off for Petco. There is no stated policy in this regard. I would feel better if customers' donations were matched by those of CEOs and owners.

Walgreen's at least, unlike Petco, donates 100% of customer donations to charity. They absorb the administrative costs themselves. Many companies match their employees' gifts to charity. Not Walgreen's. Let alone customer donations. No way they're matching them. They have no problem dunning employees and customers, but mum is the word regarding corporate profits.

Gregory D. Wasson President and Chief Executive of Walgreen's until 2014 made $13,632,741 for fiscal year 2013. He is also a Director of Verizon. How much did he donate to match his customers' charitable donations? After his departure Stefano Pessina took over as CEO. Walgreen's has other fish to fry than worrying about matching their customers' charitable donations.

Recently they were considering moving their corporate headquarters to Switzerland to avoid paying US taxes. Barry Rosenstein, founder and managing partner of New York-based hedge fund Jana Partners pushed for Walgreen's to move its headquarters to Europe to slash its tax bill, an idea that Walgreen's backed away from in August following a firestorm of public controversy and congressional backlash.

Walgreen's, in addition to bilking its customers out of charitable contributions, also lets its employees contribute to charity while not making any matching charitable contributions itself:

The Charity Choice program allows Walgreens employees to donate to four organizations aimed at improving health and wellness -- Juvenile Diabetes Research Foundation, American Heart Association, American Cancer Society and United Way. Each pay period, employees elect the amount they choose to donate.

These corporations are all for their customers and employees contributing to charity while neglecting to do so themselves. I for one will contribute to the charity of my choice myself without using some noncontributing corporation as a middleman. I don't need any prompting from some commercial profit making enterprise, thank you.

If you do want to donate at the check out line, make sure that your sales receipt shows the amount. That's the only way you will be able to use it as a deduction at tax time. The least they could do after tracking each transaction with their "points" program is to provide you with a year end print out of all the charitable donations you've made. But I guess that is asking too much. It might knock a few dollars off of corporate profits for them to do that.

December 21, 2013

It’s charity time, and not just because the holiday season reminds us to be charitable. As the tax year draws to a close, the charitable tax deduction beckons.

America’s wealthy are its largest beneficiaries. According to the Congressional Budget Office, $33 billion of last year’s $39 billion in total charitable deductions went to the richest 20 percent of Americans, of whom the richest 1 percent reaped the lion’s share.

The generosity of the super-rich is sometimes proffered as evidence they’re contributing as much to the nation’s well-being as they did decades ago when they paid a much larger share of their earnings in taxes. Think again.

Undoubtedly, super-rich family foundations, such as the Bill and Melinda Gates Foundation, are doing a lot of good. Wealthy philanthropic giving is on the rise, paralleling the rise in super-rich giving that characterized the late nineteenth century, when magnates (some called them “robber barons”) like Andrew Carnegie and John D. Rockefeller established philanthropic institutions that survive today.

But a large portion of the charitable deductions now claimed by America’s wealthy are for donations to culture palaces – operas, art museums, symphonies, and theaters – where they spend their leisure time hobnobbing with other wealthy benefactors.

Another portion is for contributions to the elite prep schools and universities they once attended or want their children to attend. (Such institutions typically give preference in admissions, a kind of affirmative action, to applicants and “legacies” whose parents have been notably generous.)

Harvard, Yale, Princeton, and the rest of the Ivy League are worthy institutions, to be sure, but they’re not known for educating large numbers of poor young people. (The University of California at Berkeley, where I teach, has more poor students eligible for Pell Grants than the entire Ivy League put together.) And they’re less likely to graduate aspiring social workers and legal defense attorneys than aspiring investment bankers and corporate lawyers.

I’m all in favor of supporting fancy museums and elite schools, but face it: These aren’t really charities as most people understand the term. They’re often investments in the life-styles the wealthy already enjoy and want their children to have as well. Increasingly, being rich in America means not having to come across anyone who’s not.

They’re also investments in prestige – especially if they result in the family name engraved on a new wing of an art museum, symphony hall, or ivied dorm.

It’s their business how they donate their money, of course. But not entirely. As with all tax deductions, the government has to match the charitable deduction with additional tax revenues or spending cuts; otherwise, the budget deficit widens.

In economic terms, a tax deduction is exactly the same as government spending. Which means the government will, in effect, hand out $40 billion this year for “charity” that’s going largely to wealthy people who use much of it to enhance their lifestyles.

To put this in perspective, $40 billion is more than the federal government will spend this year on Temporary Assistance for Needy Families (what’s left of welfare), school lunches for poor kids, and Head Start, put together.

Which raises the question of what the adjective “charitable” should mean. I can see why a taxpayer’s contribution to, say, the Salvation Army should be eligible for a charitable tax deduction. But why, exactly, should a contribution to the Guggenheim Museum or to Harvard Business School?

A while ago, New York’s Lincoln Center held a fund-raising gala supported by the charitable contributions of hedge fund industry leaders, some of whom take home $1 billion a year. I may be missing something but this doesn’t strike me as charity, either. Poor New Yorkers rarely attend concerts at Lincoln Center.

What portion of charitable giving actually goes to the poor? The Washington Post’s Dylan Matthews looked into this, and the best he could come up with was a 2005 analysis by Google and Indiana University’s Center for Philanthropy showing that even under the most generous assumptions only about a third of “charitable” donations were targeted to helping the poor.

At a time in our nation’s history when the number of poor Americans continues to rise, when government doesn’t have the money to do what’s needed, and when America’s very rich are richer than ever, this doesn’t seem right.

If Congress ever gets around to revising the tax code, it might consider limiting the charitable deduction to real charities.